2016 Branham300 – Canada’s Top Tech Companies

The Branham300 is now in its 23rd year, and the companies that comprise the Top 250 have set a new revenue record. The numbers are:

Fiscal 2014: $90.9 billion, a year-over-year increase of 6.8%

Fiscal 2015: $96.1 billion, a year-over-year increase of 5.7%

That is a remarkable total.

Mapping Canada’s tech sector
We are pleased to announce a partnership this year with Esri Canada. Esri created amazing maps for our Top 250 list, Multinationals and Up and Comers, and highlighted our Top 5 Movers and Shakers.

Use this innovative technology to look up your company, assess competitors and perform a number of queries.

The list represents a snapshot of the companies surveyed, taken at the end of their fiscal year end of the calendar year before the list is published. For example, the 2016 edition of the Branham300 is based on 2015 fiscal year end results. Eligibility is based on specific criteria. Where only estimates were provided, these estimates have not been updated to reflect later figures.

Canada’s ICT Industry: Consecutive Growth

This is the sixth consecutive year the Top 250 recorded growth and set record revenues.

Revenue total: $96.1 billion.

Year over year: 5.7% growth, down a little from last year’s 6.8%.

Growth: 75% of the Top 250 companies grew their revenue.

Double and triple-digit growth: 54% of the Top 250 companies achieved big growth.

Holding at #1
Last year, BCE supplanted BlackBerry as the leader of the Top 250 list, and for 2016 BCE is again Canada’s revenue champion.

Looking at only wireless and Internet revenue, BCE’s 2015 total is $14.04 billion. That is an increase from the previous year’s $12.23 billion.

The growth rate is even more impressive. In fiscal 2014, BCE’s revenue grew 5%, but in fiscal 2015 that climbed to 15%.

This is a special accomplishment considering BCE’s market space: it faces strong competitors and operates in an established business, selling products and services that are tough to differentiate.

Overall it was a good year for Canada’s communications providers. All eight of the companies tracked in this space generated revenue increases, including Shaw at 9%, Telus at 6%, Rogers with 5% and MTS at 1%.

BlackBerry still struggling

BlackBerry had another tough year, with revenue dropping from $8.7 billion in fiscal 2014 to $4.3 billion in fiscal 2015. This large loss pulled down the results for the entire Kitchener-Waterloo region: collectively it earned 23% less than the year prior.

Results by region

These four provinces represent 97% of the Top 250 companies, and 98% of total revenues. Those numbers are consistent with previous years.

Overall revenue figures also repeated the trends seen last year.

Province

2014 revenue (billions)

2015 revenue (billions)

Growth (%)

Ontario

$41.11

$41.48

0.9

Quebec

$28.62

$32.42

13.3

B.C.

14.22

$15.27

7.4

Alberta

$5.3

$5.34

0.8

Biggest growth: Quebec once again grew the most, with 13.3%. This compared to 15% last year. The two companies with the largest increases in Quebec were Alithya at 98% and Amaya Gaming Group, last year’s winner, at 90%.

Ontario: In 2013, Ontario’s total Top 250 revenue declined by 12%, but last year it reversed that direction and grew by 1.77%. This year’s growth of 0.9% is moderate but at least the province is still moving in the right direction.

Sector Performance

The Top 250 is divided into the industry’s four major sectors:

Software: Accounting for 18.5% of Top 250 revenue, the sector comprises 37% of companies.

The number one Software company this year is BlackBerry. This is the first time the company has been placed in the Software category. The move was made based on its corporate direction and revenue mix. BlackBerry generated $4.3 billion in revenue in fiscal 2015.

X Service Providers: Once again, the x Service Provider category (which includes, for example, Internet Service Providers and Application Service Providers) generated by far the most revenue, comprising 45% of the total, while only containing 9% of the companies.

BCE again led the group, with earnings of $14.04 billion.

ICT Professional Service: The sector saw little change; its 37% share of the Top 250 companies is almost the same as the 36% last year. Its share of revenue came in at 21.5% in fiscal 2015.

CGI was again the flagship for overall services revenue, although at $10.3 billion it suffered a 2% drop over the previous year.

ICT Hardware and Infrastructure: This sector declined sharply, as we moved BlackBerry to the Software category. The list’s 2015 score of $15.8 billion is down from $22.3 billion in 2014.

However, this allowed a new company to be named Hardware champ: Celestica moves to the number one spot with revenue of $7.2 billion.

Fiscal 2016 was a good year overall for Multinational companies operating in Canada. We estimate that the 25 most prominent non-Canadian ICT companies generated $30.4 billion within Canada, up from $26 billion in 2014.

Part of that is due to one large change in the line-up: TekSystems was purchased by Allegis and therefore disappeared from our list. We replaced it with Alphabet (Google), and that company had a good year; it increased its Canadian revenue by 16%, coming in second only to IBM.

The other notable performer within Canada was Microsoft, coming in with a 10% revenue climb.

Canada continues to produce world-class start-up companies. The Top 25 Up and Comers is Branham’s chance to recognize promising young companies at the beginning of their successes, and is the only Branham list not based on revenue.

As with all analyses of Canada’s tech sector, Ontario holds the most companies on the Up and Comers list. 76% of Up and Comers came from Ontario in 2015, with 12% in BC, 8% in Quebec and 4% in Nova Scotia.

These are the companies we think will land on the Top 250 in five or 10 years.

The Movers and Shakers list recognizes the companies which climbed the most spots over the year.

In 2015, the 25 Movers and Shakers climbed a total of 624 spots. The best climbers were:
Tangentia, up 45
SEB, up 38
Engagement Labs, up 37.

But it is with the revenue measure that this list really takes off. Combined revenue for the Movers and Shakers last year was $325.4 million. This year, that total jumps to $893 million.

That means that larger companies tended to generate significant increases this year compared to last.

Growth, however, continued to slow. Among the Top 15 Growth companies, the average rate of increase was 687% in 2013, 142% in 2014 and 130% in 2015.

While this seems to contradict the record set with the overall Top 250 revenue this year, in reality it simply means that the largest revenues are coming from established players which grow at moderate rates, typically less than 10%. Telus and Rogers, for example, contribute huge revenues to Canada’s tech sector but grew last year at 6% and 5%, respectively.

2015 in Review

The ICT industry in Canada continues to achieve year-over-year growth and set revenue records.

Even with our understanding of Canada’s ICT sector, however, we were surprised by the size of the Top 250 total. A total of $96.1 billion is truly remarkable.

And while companies like BlackBerry continue to struggle, there are new organizations to take its place, such as Shopify, a new entrant to the Top 250. Ottawa’s Shopify entered the list at number 37 and its revenue of $262.5 million jumped an impressive 95% over the year prior.

This is also a year in which front-runner BCE actually extended its lead. Last year, the company was ahead of Rogers by only $1.5 billion; this year, the gap is $5.1 billion. It seems that BCE’s real competition is now Telus, which this year moves into the number two spot. It’s total of $10.8 billion is $3.3 billion behind BCE, and the firm grew 6% last year.

Rounding out the top three is CGI; in third this year it is barely behind Telus.

Every year, ICT companies will jockey for position in Canada’s fast-moving tech sector, but what doesn’t change is the depth, innovation and growth of Canadian companies.

Total revenue of $96.1 billion is remarkable, and the 250 Canadian ICT companies which earned a Top 250 honour are right to be proud.

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2016 Branham300 Sponsors

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